We analyze the short- and long-run effects of public education on economic growth and welfare. In so doing, we extend an R&D-based economic growth model by including a governmental sector that levies labor income taxes and uses the proceeds to finance teachers. An increase in the tax rate...

We introduce publicly funded education into R&D based economic growth theory. Our framework allows us to i) explicitly describe a realistic process of human capital accumulation within these types of growth models, ii) reconcile semi-endogenous growth theory with the empirical evidence on the...